A snap survey of members of the Association for Consultancy and Engineering (ACE) reveals long-term concerns over inflation, with 80% of respondents viewing it as an issue in the next 12 months and beyond.
All members stated that inflation was an “operational concern” – 20% said it had led to higher energy costs with anecdotal responses revealing the extent of this impact. One company shared that gas and electricity costs for their HQ “had tripled.”
There were also concerns around client confidence, with 20% stating that it had already been impacted. As well as apprehension over projects stalling owing to material price increases, there were worries over the impact inflation was having on the overall economy, and on the pipeline of projects next year.
Wage inflation was also flagged as an issue, with 60% saying it had negatively impacted recruitment. Half of respondents stated they are increasing staff wages as a result.
Despite increased costs, 30% stated they were not significantly changing their approach this year, and only 20% indicated that they will be passing on costs to clients. Even in these challenging economic circumstances, 90% of respondents are still expecting their business to grow in 2022.
Commenting on the snap survey results, Stephen Marcos Jones, CEO of ACE said: “Our snap poll reveals the impact inflation is already having on consultancy and engineering. Times are tough across the entire construction supply chain and our members are also feeling the pinch – whether that’s in increased wage or energy costs, or in weakening client confidence.
“There are several practical steps that could be taken to mitigate inflationary impacts. The Government has already offered support to households on energy, but there is no reason equivalent support could not now be expanded to businesses. Public sector clients could also help by adapting contracts to increase day rates in line with inflation.”
“These are just two examples of tangible support for our sector, and we look forward to sharing these ideas and more with officials over the coming weeks.”
Respondents reflected ACE’s membership base, which is made up of 370 member companies, 86% of which are SMEs with fewer than 50 employees. The snap survey was open between 20 and 25 May 2022.